Plugging The Gap: Finding Funding When Your Business Is Waiting To Be Paid

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Waiting to be paid by your clients and customers can be very frustrating when you run a business. Not only does this mean that you miss out on interest from the money you’re making, but it also means that you can be left without the resource to cover the expenses that you accrue over time. Thankfully, there are several ways to overcome issues like this, making it possible for your business to plug the gap and keep operating as normal when payments are due. To give you an idea of how this works, this post will be exploring some of the best ways to secure funding in circumstances like these.

Bridging Loans

Banks understand that loans don’t always need to be long-term. In fact, bridging loans have been around for a very long time, and are designed to last as little as a week or two. This can give you all the time you need to get invoices and other bills paid by customers, while also giving you the funds required to continue working properly. A 10-day bridge loan is a good place to start, with most customers and clients paying their bills nice and quickly once you’ve sent them a reminder. Of course, though, you need to make sure that you keep the lender in the loop if you can’t make a repayment when you’re supposed to.

Invoice Finance

Invoice finance has been around for a very long time, offering businesses the chance to borrow money against the invoices they have outstanding. In some cases, this will be done as credit, though some invoice finance providers will be willing to simply buy your invoices and take them off your hands. This will mean that they have to deal with chasing up your clients, taking the risk out of your business and getting you on the right track. You may need help from a financial broker to get a service like this off the ground.

Merchant Cash Advances

This final option will only be open to those that have some sort of retail business that is able to accept money through payment terminals. Merchant cash advances enable you to start a line of credit that uses your card machines as the basis for your repayments. Once you take out a loan, the money will slowly be paid back from the transactions that go through your machine, usually at an agreed percentage rate. This option works very much like an overdraft and is widely considered to be one of the safest ways for businesses to borrow money.

With all of this in mind, you should be feeling ready to overcome the challenge of funding your business when payments from customers are overdue. This sort of issue doesn’t have to be the end of the world, but you need to make sure that you take the right steps if you’re going to find success along the way.

What Should You Do Before Buying a Business?

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Buying a business can be a great way to get started in business without having to grow a company yourself. You get an existing company that already has all of the necessary elements in place, so you can get to work with running the business right away. If you’re thinking of buying a business, there are some things you might want to do.

Weigh Up the Pros and Cons

While there are many benefits to buying an existing business, there can also be a variety of disadvantages. It’s important that you know the good reasons for buying a business but also why you might need to be wary about doing so.

Understand the Process

You don’t want to start buying a business without understanding how it works. You need to know the practicalities and legalities so you understand the ins and outs of what buying a business entails. Having practical and legal help will ensure you get it right.

Know What You’re Getting

You need to know what exactly you’re buying, especially when making a purchase as large as an entire business. What are the physical assets that you will receive, as well as the intangible assets that will be included as part of the business.

Get Your Money’s Worth

When you’re putting your money on the line, you don’t want to spend more than you need to. You should get what you pay for, and ensure you’re buying something valuable. Understanding the value of the business you’re interested in is essential.

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